You are buying a house and trying to decide when you want to mortgage to mature. You are going to borrow $170,000. Your credit is good, so you will get the lowest rates available. You have two choices. You can finance for 30 years at an interest rate of 3.85% per year, or for 15 years with an interest rate of 3.15% per year. Set up a full amortization schedule for each of these options to help you make your decisions (so you will have two worksheet tabs in the file, one for the 15-year loan and one for the 30-year loan).

On a third tab, calculate the extra principal payment needed each month if you take the 30-year loan but decide to pay it off in 15 years (so you owe nothing after 180 monthly payments). You can use either of the methods we used in class to calculate the extra principal.